WORLD HISTORY

Detailed explanation-1: -Mercantilism was a form of economic nationalism that sought to increase the prosperity and power of a nation through restrictive trade practices. Its goal was to increase the supply of a state’s gold and silver with exports rather than to deplete it through imports. It also sought to support domestic employment.

Detailed explanation-2: -The mercantile theory held that colonies exist for the economic benefit of the mother country and are useless unless they help to achieve profit. The mother nation should draw raw materials from its possessions and sell them finished goods, with the balance favouring the European country.

Detailed explanation-3: -How does mercantilism benefit the Mother Country? Colonies supply raw materials at a discounted price to the Mother Country. The Europeans would then make those raw materials into finished products and then sell those finished products back to the colonies for a higher price.

Detailed explanation-4: -Definition: Mercantilism is an economic theory where the government seeks to regulate the economy and trade in order to promote domestic industry – often at the expense of other countries. Mercantilism is associated with policies which restrict imports, increase stocks of gold and protect domestic industries.